Flatten the base of STL file & cut it into a regular shape
Import model from stl format

In edit mode, select all vertices and delete duplicates (Merge distance in 2.80) with desired accuracy

Select all faces in edit mode and Extrude it down

Resize selected faces by Z axis to 0, align it by lowest vertice of top surface

Select all faces, again remove duplicate vertices and Recalculate Normals (if everything fine you do not need to make it Inside)

Add Cylinder object and make it right

In edit mode remove cylinder top face, select all leftover faces and Extrude region to cover the main object

Add Boolean modifier to Terrain and set up Difference with Cylinder

Profit!